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IP Alert: USPTO Abused Discretion by Allowing Further Abuse by Ex Parte Reexamination

October 22, 2021

On September 29, in In re Vivint, Inc., the Federal Circuit clarified the interplay between petitions for inter partes review (IPR) and a subsequent request for ex parte reexamination. The court held that the USPTO abused its discretion and acted arbitrarily and capriciously by ordering, and subsequently refusing to terminate, reexamination based on nearly identical arguments previously presented by the same party in a petition for IPR, which was denied under 35 USC § 325(d) as abusive by the Patent Trial and Appeal Board (PTAB). The court held this was an abuse of discretion despite agreeing that the USPTO correctly determined that the arguments presented substantial new questions of patentability (SNQs).

Vivint Inc. (“Vivint”) sued for infringement of four patents. While defending itself in district court, filed fourteen IPR petitions, including three successive petitions that challenged the validity of one asserted patent, the ’513 patent.

The PTAB declined to institute trial on the first two petitions on the merits, but denied the third petition under § 325(d) because it was found to be an abusive, incremental challenge that used the PTAB’s prior two denials as a roadmap to correct deficiencies. More than a year after the third denial, filed a request for reexamination of the ’513 patent, largely based on the same art and arguments raised in the third IPR petition. The USPTO found SNQs and ordered reexamination.

Vivint petitioned the USPTO, arguing that the USPTO should have denied reexamination as abusive under §325(d). The USPTO denied the petition, arguing they could not consider petitions filed after reexamination was ordered. Vivint filed a second petition seeking reconsideration, which was also denied. An examiner issued a final rejection of all claims in the ’513 patent, and the PTAB affirmed. Vivint appealed.

On appeal, Vivint first argued that because the patentability questions presented in the request for reexamination had already been presented to the Patent Office in the third IPR petition, there could be no SNQ. The Federal Circuit disagreed, finding that two of the patentability questions with respect to a single claim were new. Two recycled IPR positions, while presented, were never considered and decided on the merits, as the third IPR petition was denied under §325(d). Accordingly, the court agreed that the reexamination request raised four SNQs.

Vivint next contended that the USPTO abused its discretion by ordering reexamination based primarily on the same arguments found to be abusive in the third IPR petition and subsequently refusing to terminate the proceeding under §325(d). The Federal Circuit agreed, holding that the USPTO cannot deny an IPR petition for abusive filing practices then grant an almost identical reexamination request. Accordingly, the Federal Circuit vacated the PTAB’s decision and remanded with instructions to dismiss the ex parte reexamination.

This decision provides guidance to both petitioners filing, and patent owners facing, multiple post-issuance proceedings. Petitioners should be wary of filing a reexamination request based on arguments previously presented in an IPR petition and should address a potential §325(d) challenge in their request. To improve the likelihood of success, a reexamination request should be filed prior to a decision on a similar IPR petition. Patent owners should be aware that they may contest a reexamination request based on the same or similar art or arguments previously presented to the USPTO under §325(d).

For more information on this topic, please contact Fitch Even partner Paul B. Henkelmann.

Fitch Even law clerk Prestin Van Mieghem contributed to this alert.

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